Ban on metal scraps export would boost sales of value-added ingots of copper, brass, bronze and stainless steel in global market, says Gazi Mukarram Ali Chowdhury
Gazi Mukarram Ali Chowdhury started his career as a human resource executive at a garment factory.
But soon he found the job uninteresting. He started considering making his own fortune.
A childhood memory of his neighbour's business of scrap propeller supply inspired Mukarram to start his own venture. Together with a friend he set up the Marine Safety System.
The firm has now grown into the country's largest supplier of scrap propellers with 340 employees.
The Marine Safety System has bagged the National Export Gold Trophy six times in the past eight fiscal years. On September 1, Mukarram received the gold trophy from Prime Minister Sheikh Hasina.
Gazi Mukarram Ali Chowdhury, chairman of the Marine Safety System, tells Shamsuddin Illius of The Business Standard about how they began the business, how metal scraps are processed into ingots of metal for exports, and their success.
In 19 years, you have grown into a global business. Tell us what encouraged you into marine safety business?
In 1997, I started my career at a garment factory in Chattogram EPZ as a human resources and admin officer. The monotony of the job made me bored. The never-increasing, limited salary also limited the potentiality of my life.
When I was considering doing something different, my childhood friend Kamal Uddin Ahmed (now managing director of the Marine Safety System) offered me to be a partner in the business.
I left my job in 2000 and we sailed off the journey of Marine Safety System.
We started with trading marine safety items. In 2003, we started trading non-ferrous metal scraps and ingots such as copper, brass, bronze, cupro-nickel, red brass and stainless steel.
In the first three years from 2000 to 2003, we collected safety items from ship-breaking yards and sold those in the local market. From that we named our company Marine Safety System.
Did you succeed in this business?
As this business did not bring any success, we were looking for another way. One day, I recalled my childhood neighbour's propeller exporting business.
When I was a child, I used to see him cutting propellers. Inspired by this memory, we started non-ferrous metal-scrap trading.
We started exporting it as I had export knowledge learnt from my garment job.
In this business, we were deprived and cheated in many ways. Merchants used to tell us about one kind of metal and supply another. Then in 2006, we bought a metal analyser to identify the right metal.
Actually, after buying the machine, fortune started smiling on us. From 2000 to 2006 was a period of struggling and learning for us. We faced many ups and downs during this period but we did not lose hope.
When did you start seeing turnover?
We started the company with a capital of Tk40 lakh – $47,000 – taking loans from my mother and other relatives, and by selling my shares in the stock market. Now our annual turnover exceeds $60 million.
Now, we collect scraps from around 70 ship-breaking yards for copper, bronze, brass and stainless steel. We also process these into ingots.
In 2016-17, Marine Safety System exported $18.45 million. At the same time, our sister concern Ni-Alco Alloys Limited earned over $10 million by exporting ingots.
Where do you export now?
Our ingots of copper, brass, bronze, cupro-nickel, red brass and stainless steel go to 20 countries, including Japan, Germany, Korea, Taiwan, China, Vietnam, the Philippines, Malaysia, Latvia, Spain, Italy and the USA.
We cover 60-70 percent scrap propeller export market in Bangladesh.
Your company received the gold trophy six times in eight years. What makes you different from others in the business?
We got the trophies for exporting metal scraps. It is a big achievement. As we are based in Chattogram, we may be a small exporter, but our importers are big.
Moreover, we received the award from the prime minister herself. We are honoured by this. It inspires us to export more to earn foreign currency for the country. Though this business is very competitive, receiving the award from the prime minister worked like fuel for us to export more.
As we are an export-oriented company, we follow safety, security and international standards at workplace.
You are the largest scrap propeller supplier of the country. What is the size of this business worldwide? Which industries do use scrap propellers?
Propeller manufacturing business sees $1 billion yearly. Around 10-20 percent comes from scrap materials and the rest comes from virgin metal.
The market size of scrap propeller business in the world is $150 million. Our exports are worth $30 million.
The Marine Safety System exports about $20 million and the Ni-Alco Alloys Ltd exports over $10 million yearly. We cover 70-80 percent of Bangladesh export market of scrap propellers.
India, Pakistan, China, Turkey and the Netherlands also export scrap propellers. These are mainly used in factories that manufacture fridge, electric cables and air conditioner.
Do you think steel, brass and copper generated from scrap vessels are enough to meet the local demand?
No, it is not enough. Many industries have been established in Bangladesh. To meet the local demand of these industries, we need to import metal.
Companies that produce fridge, air conditioner and electric wire are the main consumers of copper.
Do you supply copper and brass to the local cable and other industries as well?
No, we are 100 percent export-oriented.
Do you think the government's policy is sufficient for the growth of the sector you represent?
Basically, the government has no policy for the scrap market – the export of copper, bronze, brass, ingots and stainless steel.
The government gives incentives to the garment, ship-building, and biscuit factories. We export unconventional items but we do not get any incentive.
We pay advance income tax and VAT if prices in international markets come down. We have to count losses.
If we do not export scraps, these would be smuggled to India. It happened earlier.
India has markets for both local consumption and export. When we started exporting non-ferrous metal scraps and ingots, smuggling reduced to an extent. And now, the government is earning foreign currency from this industry.
If the government banned direct export of scraps and made it compulsory to export these scraps after processing into ingots, then this sector would expand more. This would create a lot of jobs and the government would earn more foreign currency.
Exporting ingots processed from scraps is more profitable as it has good price in the international market.
I appreciate the government's decision to bring down the interest of bank loan to single digit. If it is implemented, it will help us.
There are concerns about environment pollution and workers' safety in the ship-breaking industries. How do you respond to such concerns?
There have been two kinds of reactions – positive and negative. NGOs that work on ship-breaking yards overreact to everything and that causes an image crisis for the promising sector.
If you look at the competitor countries – India and Pakistan – you may not get such reactions from their local NGOs.
They do not have easy access to the ship-breaking yards in their countries. In our country, everyone has easy access to our ship-breaking yards. It is good for us but the overreaction causes an image crisis for the country and for this sector.
The positive side is that because of the good vigilance of the Environment Department and other government organisations, everyone keeps their ship-breaking yards clean and are careful about safety. Hence, accidents in ship-breaking yards have reduced by a great extent.
Accidents take place mainly because of depression and unmindfulness of workers. For many reasons, the labourers suffer from depression.
For an instance, last year one of our security guards fell off a high place because he was feeling drowsy while working. He was injured in the leg. He was hospitalised for three months and was given an artificial leg.
We bore all the treatment expenses. He is now working with us after recovery.
All shipyards in Bangladesh are going to turn into green shipyards within one year as per the Hong Kong International Convention for safe and eco-friendly recycling of ships.
I hope the entire shipyard will be safe for environment.
The Marine Safety System is very cautious about environment. We have a team to maintain and monitor the environmental, security and safety issues.
Workers are often reluctant to follow safety measures. We terminate those who do not follow safety measures.
We organise trainings and motivational sessions every month to make workers aware of the safety and security issues.
The homepage of Marine Safety System mentions your social commitment. Would you please elaborate on your company's social activities?
We always try to do something for poor people. As our ship-breaking yard is based in Sitakunda, the local people of Madambibirhat and Bhatiari areas come to us for help.
We have helped over 30-40 destitute families so far – fully or partially – to marry off their daughters. We re-built houses of some poor people whose houses were destroyed in cyclones.
We donate money to some orphanages. We also help the family members of our employees in times of miseries.
What future do you see for the metal scrap export sector?
This sector has potential both nationally and internationally. The development of any country is related to the use of metal. There may be ups and downs in terms of price but the demand will be there forever. Heavy industries are growing up in Bangladesh rapidly. So, there will be demand.